TN to levy stamp duty on company mergers, restructuring

Companies in Tamil Nadu going for restructuring or acquisitions will have to pay stamp duty, following an amendment introduced by the state government to the Indian Stamp Act 1899.

The amendment, Indian Stamp (Tamil Nadu Second Amendment) Act, 2012, introduced in the assembly today provides for levy of stamp duty on transfer of properties as a part of amalgamation or reconstruction of companies.

This will be applicable to transfers effected through orders of the High Court under Section 394 of the Companies Act, 1956, or an order of the Reserve Bank of India under Section 44A of the Banking Regulation Act, 1949, in the case of banking companies, a Business Line report said today.

The merged company will be subject to a stamp duty of 2 per cent of the market value of the immovable property of the transferor company or 0.6 per cent of the aggregate market value of the shares or other marketable securities issued as a part of the transaction, whichever is higher, the report said.